A cohort of patients with chronic type B hepatitis is being evaluated and followed to determine the long-term natural history of this common form of chronic liver disease. Selected patients have been entered into therapeutic trials in which antiviral and/or immunomodulatory agents have been administered. Results of our randomized, controlled trial of alpha-interferon for chronic type B hepatitis indicate that 32% of patients had a favorable serum biochemical and serological response to therapy. Efforts are now being directed towards improving this response rate. A pilot study of alpha and gamma interferon in combination is underway. Patients are treated with 8 week courses of gamma interferon in gradually increasing doses followed by alpha interferon in increasing doses and finally by alpha and gamma interferon in combination. Changes in serum levels of hepatitis B DNA polymerase are monitored at frequent intervals to determine the efficacy of treatment. To date, 8 patients have been entered into this study and 4 have completed all 3 arms of therapy. DNA polymerase levels are consistently reduced in a dose-dependent fashion in all patients by both alpha and gamma interferons. Maximal inhibition with gamma interferon was 25% below pre- treatment values, whereas the corresponding inhibition for alpha interferon was 60%. So far, in only 1 patient subjected to this regimen has DNA polymerase in serum become undetectable. Thus these studies indicate that both alpha and gamma interferons are effective in inhibiting hepatitis B DNA polymerase. Further studies are required to determine if these agents, when given in combination, are more effective than when either is used individually.